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On Buying And Selling, Or How Yunel Escobar Is Like Pets.com

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After the Braves traded Yunel Escobar to the Blue Jays for Alex Gonzalez, there was much talk in certain circles about how the Braves "sold low" on Escobar because he has been struggling this year, and about how they "bought high" on Gonzalez because he has been having a good season. This sort of stock market metaphor is common in sports, particularly when trades are made. It is a useful shorthand for a player's perceived value, no doubt. But I've come to be quite annoyed with it.

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Why? Well, it all comes down to the implication of the metaphor. When someone says that the Braves "sold low" on Escobar, they really mean two things: that they did not get enough value for him, and that he is going to get better in the future. The problem with implying this is that a player's value cannot be summed up so simplistically. In particular, a stock's (or player's) relative value is not a particularly good predictor of future value.

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Here's an example of what I mean: Just because a stock is lower than it previously was does not mean that it cannot go lower. Sometimes when a stock is going down, it is a sign that something is truly and seriously wrong. For instance, it might be true that a person would be "selling low" on his Pets.com stock if he sold it for $20 a share after it had been as high as $100 a share. But if the stock was worthless soon after, our poor investor would nonetheless have been making a wise move.

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The Braves clearly thought that Yunel Escobar had a little bit of Pets.com in him. Sure, the law of averages tells us that struggling players are likely to regress back up to their natural talent level. But the key phrase in that sentence is "likely to." Sometimes when a player's numbers fall off a cliff, the fall is real. It's not always logical, but it does happen. And given Yunel's attitude issues, there is good reason to think that he would never have raised his value in Atlanta.

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Perhaps the Braves did sell low on Escobar. But it's also better to sell low than to wait until a stock (or player) is worthless. The Braves got some very good value in return for Escobar. If they had waited until the end of the season and Yunel had continued to struggle, they would not have gotten nearly so much. It's a risk, no doubt. But it's not a terrible risk once you consider that Yunel could easily be the next Pets.com or Jeff Francouer.

Photographs by coka_koehler used in background montage under Creative Commons. Thank you.